­Experienced management
The company was established in 1984 by Mr. Shanker Patel and Mr. Ashish Patel with their first unit in Kolkata that manufactures railway windows and frames for the Indian Railway. The company started its second unit in Vadodara in 1998. The second unit is engaged in interior furnishing of railway coaches. The promoters have more than three decades of experience in this industry which have enabled them to establish comfortable relationships with their key suppliers and various railway departments. The Company has a present order book of RS. 485 Cr. as on January 2025, which provides it revenue visibility over the medium term. 

Moderate Financial Risk Profile
The tangible net worth of the company stood at Rs.69.86 Cr. as on March 31, 2024 as compared to Rs.62.45 Cr. as on March 31, 2023 due to accretion to reserves. The gearing of the company stood modest at 1.7 times as on 31 March 31, 2024. The Total Outside Liabilities/Tangible Net Worth (TOL/TNW) stood at 3.26 times as on March 31, 2024 as compared to 3.11 times as on March 31, 2023. The debt protection metrices of the company remain comfortable marked by Interest coverage ratio (ICR) of 2.49 times and debt service coverage ratio (DSCR) of 2.03 times for FY2024. Acuite believes that the financial risk profile of the Company is likely to remain at similar levels in the absence of any debt funded capex plans. 
 

­Intensive working capital cycle
The working capital cycle of the company has stretched compared to FY23. The company has high Gross Current Assets (GCA) Days of 228 days for FY2024 compared to 169 days in FY2023. Many orders could not be executed by the management due to non-allotment of coaches by Indian Railways. Usually, the gestation period for the orders is 6-18 months. Higher GCA days are due to other current assets in the form of advance given to suppliers, increase in inventories and debtors on a year-end basis. The inventory days of the Company stood at 87 days in FY2024 as compared to 32 days in FY2023, majorly due to year end higher inventories. Acuite believes the same is likely to reduce owing to efficient execution of orders. The debtor days stood at 130 days in FY2024 against 88 days in FY2023. The company generally receives payments within 60-75 days from raising the bill, there is higher billing during the last quarter which results in higher debtor outstanding as on year end. Days payable outstanding stood at 116 days against 84 days in FY2023 due to stretched payment terms from suppliers owing to goodwill.

Reduction in operating income in FY2024
Revenues declined in FY24 to Rs.310.85 Cr. from Rs.371.45 Cr. in FY23, with decline in PAT margins to 2.39 % (PY 2.65%) due to higher interest cost. Post COVID most of the earlier tenders were cancelled by the government due to considerable rise in all commodity rates and the government was slow in bringing out tenders for the railways sector specially with regards to interiors and refurbishment of coaches. These tenders were floated in high numbers beginning FY 24 and most of the tenders were getting allocated from Sept 2023 , but due to the Lok Sabha elections the company was not able to realise the bills raised on a timely basis. As a result of the same the topline has come down in FY 24. However, margins were higher owing to execution of higher margin orders and lower administrative and selling expenses, as their sales were lower as a result travelling charges, coolie and carting expenses were lower.